Second home owners are being forced to sell up their holiday lets in Welsh beauty spots due to rules allowing council tax rises of as much as 300 per cent.
The Labour-run devolved government announced a crackdown on second homes and holiday lets last year, allowing local authorities to impose the massive ‘council tax premiums’ – which come on top of standard rates – on some homes.
Those who run their second home as a holiday lettings business can pay cheaper business rates instead of council tax. But the threshold to meet this criteria was raised from 70 nights occupied to 182, half the year.
Holiday home owners warned that a long spell of bad weather could see them saddled with a huge tax bill after already losing out on rents, while businesses say they fear for the tourist trade if people are forced to sell up.
MailOnline spoke to one investor who is already in the process of selling his beautiful Brecon Beacons cottage – lived in by dozens of tourists each year – over fears he will be hit with whopping bills.
Second home owners are being forced to sell up their holiday lets in Welsh beauty spots due to rules allowing council tax rises of as much as 300 per cent. Pictured: Retired electrical engineer Ian Kiddle, 63, at his second home in the south east of the Brecon Beacons
The Labour-run Welsh Government announced a crackdown on second homes and holiday lets last year, allowing local authorities to impose the massive ‘council tax premiums’ – which come on top of standard rates – on some homes (pictured: view of Brecon town centre)
Ian Kiddle bought his second home (pictured) in the south east of the Brecon Beacons national park near Abergavenny, Monmouthshire in 2015
Retired electrical engineer Ian Kiddle, 63, bought his second home in the south east of the national park near Abergavenny, Monmouthshire with the inheritance he received after his father’s death in 2015.
At the time he and his wife Julie, 59, lived in Bournemouth but longed for the feel of a small countryside village and so visited their holiday home every month for about a week at at time.
But after they moved to the small village of Marnhull, north Dorset, this need was met by their new home so they turned to the furnished holiday let route in September 2020 through firm Finest Retreats.
While Mr Kiddle wasn’t expecting huge amounts of business due to the pandemic, once rules were relaxed their venture was booming – and last year his house was booked for nearly 200 days as Brits went on more ‘staycations’ in the wake of Covid.
Commenting on how the rule changes affected him, he said: ‘With the new rule it’s 182 days a year that you have to rent it.
‘That’s six months of the year and you only really rent that house during the summer so it’s difficult.’
He said that, despite a 25 per cent price reduction, they were finding it harder to hit the 182 days target this year because fewer Britons are taking holidays due to cost of living crisis squeezes.
He said if they were to reduce prices any further, they would not even be able to cover their expenses in maintaining the property, including their gardener and housekeeper.
Mr Kiddle said: ‘All those things together have just got us to the point where it’s just not worth it.
‘There’s a lot that goes on and a lot of people we employ to deal with it all. We had to call a plumber this week. There’s constantly these costs of maintenance.
‘And for the people we employ, the impact of us selling impacts them.’
The stunning view of the Brecon Beacons from Mr Kiddle’s holiday let cottage
Mr Kiddle said that, despite a 25 per cent price reduction, they were finding it harder to hit the 182 days target this year as fewer Britons take holidays due to cost of living crisis squeezes
Mr Kiddle and his wife turned to the furnished holiday let route in September 2020
Holiday home owners warned that a long spell of bad weather could see them saddled with a huge tax bill after already losing out on rents
‘It’s a lovely location and the views across the mountains – people love it,’ Mr Kiddle said
Mr Kiddle said the man who is buying his cottage is of a similar age to him and it is unlikely that he will contribute to the local economy as much as the holidaymakers he rents too.
He said he was sad about being forced to sell the property as ‘we enjoy providing it, getting good reviews, and the fact people enjoy going there.
‘And it’s a lovely location and the views across the mountains – people love it.
‘It’s sad that people will miss out on it – people book it for Christmas and New Year and they won’t be able to. We’ve had repeat bookings over the last few years where people have loved it so much they came back, but it won’t be available now.’
Angela Judd, 48, who currently lives in Warwickshire but owns a cottage in Snowdonia, is also considering selling up due to the new rules.
If forced to pay council tax premiums, she could be in line to pay around £5,000 to the council.
‘I can’t afford to get a £5,000 bill because I’m day short of a ridiculous “you must let it for half a year” target. No other business has that kind of restriction.
‘I understand people abuse the whole rating system with holiday lets but they should address that in a different way compared to people who have genuine holiday let business rather than penalise everyone.
Ms Judd added that being forced out of the industry ‘completely devalues’ the area as a place to live. ‘We put a lot of value into these areas that have no industry and the business we bring there is unbelievable,’ she said.
‘Builders, gardeners – and no one is going to have those jobs.’
Richard Bond, the founder of holiday let agency Finest Retreats slammed Welsh First Minister Mark Drakeford (pictured) over the second homes council tax policy
She added concerns for those who are employed by holiday let owners losing their livelihoods, saying: ‘Our housekeeper does the laundry, changeovers and everything. We provide her living this is her livelihood.
‘She is a mother and she wouldn’t have a job if it weren’t for us “terrible second home owners”.’
Richard Bond, the founder of holiday let agency Finest Retreats, which is used both by Mr Kiddle and Ms Judd, slammed the Welsh Government for the rules, saying: ‘You have a lot of incredibly nervous owners out there who are very worried about hitting the target.
‘If they hit 181 nights they have this huge council tax bill but if they hit 182 then they don’t.
‘It doesn’t make sense when things like illness crop up so they can’t let it for so long anymore.’
He also slammed Welsh First Minister Mark Drakeford and ex-Plaid Cyrmu leader Adam Price for the policy, saying: ‘There are exemptions, like if the property is used for work and if holiday property with planning rules attached.
‘Both of those exemptions apply to Adam Price, the ex-leader of Plaid who owns a second home and uses it for work. Mark Drakeford owns property on the park that has that planning clause so he’s managed to wiggle out of it as well.
‘It’s very funny both the exemptions handily apply to both the leaders in Wales when those rules were brought in.’
Mr Bond also said that random impacts such as weather could result in a holiday let owner being saddled with a huge tax bill, saying: ‘Weather has a big impact on bookings. When we had the hot spell in June we had a mini-surge in last minute bookings and the majority of bookings are last minute decisions.
‘If the weather is bad they’re stuck with a higher tax bill – some would query whether its worth continuing to holiday let, some would say it’s not worth letting it out.
‘The majority of owners are not making crazy returns on properties – it’s only three to five per cent on average, so when they’re hit by big bills it’s barely worth doing.
Firms who are reliant on the tourist industry say squeezing second home owners in selling holiday cottages is a further blow to the local economy at a time when they are already facing a number of challenges.
Chocolatier Charlotte Roskill, who runs Brecon Chocolates, said: ‘The rise is something that would affect us directly because a lot of our customers are holiday cottage owners who leave our Hay Bale chocolates for guests.
‘We have one lady in particular who buys around 100 bars a month. If she and others like her get hit over their second homes then that would be a lot of money for us.’
Firms who are reliant on the tourist industry say squeezing second home owners in selling holiday cottages is a further blow to the local economy. Chocolatier Charlotte Roskill (pictured), who runs Brecon Chocolates, said: ‘The rise is something that would affect us directly because a lot of our customers are holiday cottage owners who leave our Hay Bale chocolates for guests’
Husband and wife team Colin and Helen Jane Boulton (pictured) who run nearby Crafts from the Valley, making handmade cards, trinkets and gifts at their shop and also bemoaned the measures. Helen Jane, 62, said: ‘We need the tourists here. We get visitors from America, Canada, and this week from Holland and they need places to stay’
Businesswoman Helen Howarth, owner of holiday company Brecon Retreats, said the new tax rules were a real concern to businesses.
She said: ‘As someone who now owns three luxury self-catering holiday barns myself, I too have already had to sell two of my holiday lets last year due to the financial losses caused by the pandemic, coupled with real concern for all the changes to policies that keep being announced.
‘While the current 182-day rule does not immediately affect my busy holiday homes, I do worry about the future, especially as I employ ten local residents.
‘Introducing new council tax rules, tourism taxes, and other legislation seems to impose a disproportionate burden specifically on accommodation providers with brick-and-mortar holiday cottages and converted barns, which could hinder tourism in the region.
‘Not all tourists want to stay in glamping facilities, which don’t face the same legislation.’
Husband and wife team Colin and Helen Jane Boulton who run nearby Crafts from the Valley, making handmade cards, trinkets and gifts at their shop and also bemoaned the measures.
Helen Jane, 62, said: ‘We need the tourists here. We get visitors from America, Canada, and this week from Holland and they need places to stay.
‘If there are fewer options for people then it will have a knock on effect.’
The couple, who make all of their gifts themselves, say tourist businesses are already struggling due to rising prices and the cost of living crisis as they try not to pass on charges to customers.
Husband Colin, 56, added: ‘If you didn’t have the tourists here then it would be completely dead.
‘We heard recently someone say that “tourism doesn’t do much for Wales”, well it does here – it’s 80 per cent or more of our trade.’
Sian Bowen (pictured), 67, who runs the Two Dogs coffee shop and roastery said the holiday let rules will impact local businesses
Many businesses in Brecon town centre (pictured) are reliant on the tourist trade
Sian Bowen, 67, runs the Two Dogs coffee shop and roastery, but lives 30 miles away in Treorchy, due to the local housing situation.
She said: ‘My husband and I have been looking to move since we opened the shop two years ago and have been looking to move up here but we haven’t found anywhere to live.
‘There is no property to be had because everything that had come up was gone in a flash because people had second homes. There is more available now but it is still quite expensive.
‘But we know a couple of people who own holiday lets who are now looking to sell up so that will hit local businesses.’
A Welsh Government spokesperson told MailOnline: ‘Tourism makes an important contribution to the Welsh economy and to Welsh life. We do, though, need to ensure appropriate balance. We believe that everybody has a right to a decent, affordable home to buy or to rent in their own communities so they can live and work locally.
‘The changes to the local tax rules for self-catering accommodation and second homes are designed to help develop a fairer housing market and ensure property owners make a fair contribution to the communities where they own homes or run businesses.’
